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Greed drove BP to cut corners, plaintiffs at oil-spill trial say

By Julie Cart

Los Angeles Times

NEW ORLEANS — Energy giant BP, behind schedule and $50 million over budget drilling a deep-water well, stressed cost-cutting over safety, causing the largest offshore oil spill in U.S. history, attorneys said Monday as the company’s high-stakes civil trial began.

Lawyers provided a dramatic recounting of the April 20, 2010, explosion and fire 50 miles offshore that killed 11 crew members. Workers were preparing to temporarily cap the Macondo well 4,100-feet underwater when it blew up. The 30-story drilling vessel burned for two days before crumpling into the Gulf of Mexico.

The resulting spill of more than 4 million barrels of oil damaged the waters and economies of five Gulf of Mexico states. And the responsible party was BP, according to the lawyers representing the federal government, coastal states and private parties.

The long-awaited trial, which is expected to last several months, could expose BP to about $17 billion in fines for the violating the Clean Water Act. U.S. District Judge Carl Barbier will decide whether BP’s actions were negligent or grossly negligent, which could force higher fines on the company.

BP has already pleaded guilty to criminal charges stemming from the disaster and will pay $4 billion to settle the case, the largest environmental penalty in U.S. history. During opening statements Monday, BP’s actions were excoriated by a succession of lawyers who said the London-based company’s corporate leaders encouraged a culture of “entrepreneurial risk-taking.”

The first phase of the trial will examine the role of BP and the companies it contracted with to drill its Macondo well: Transocean, the owner of the Deepwater Horizon drilling rig; Halliburton, hired by BP to cement the well hole; and Cameron International, which manufactured the blowout preventer that failed to shut down the flow of oil during the emergency. Also included is M-I Swaco, the company that provided the material for the cement job.

A late our attempt to settle the case apparently failed. The federal Department of Justice reportedly offered a plea bargain that would require BP to pay a $16 billion penalty — $6 billion to settle the Clean Water Act violations, $9 billion for resource damage and $1 billion to fund unforeseen environmental issues, the New York Times and Wall Street Journal reported.

A settlement could be reached at any time. Lawyers for the Justice Department and BP declined to comment on settlement talks.

Michael Underhill, an attorney with the Justice Department, emphasized what he said was BP’s profit-driven culture. “The evidence will show that BP put profits above people, profits before safety and profits before the environment,” he said.

After Barbier rules on the negligence issues and assesses each company’s portion of blame, the second part of the trial is expected to begin in late summer. That phase will attempt to determine more precisely how much oil was released. That difficult accounting will determine the size of the federal fine, which could be as little as $4.5 billion.

The company would be required to pay $1,100 for each spilled barrel under the Clean Water Act. But that fine would rise to $4,300 per barrel if BP were found to be grossly negligent.

Another, later, determination of environmental damage must also be considered under a separate statute. In the days before the blowout, the scene on the rig — which some workers dubbed the “well from hell” — became increasingly chaotic, said Jim Roy, an attorney representing businesses and individuals hurt by the spill.

The captain of the vessel, a Transocean employee, had not been trained in operating the rig’s emergency systems, Roy said. The Deepwater Horizon’s emergency systems, with their required audible alarms, were disconnected out of concerns that the klaxons would wake the crew, he said.

Each company sought to minimize its responsibility for the disaster. The other four defendants — Halliburton, Transocean, Cameron and M-I Swaco, argued that the final responsibility for the rig and its crew rested with BP.

A critical well pressure test was misinterpreted by two BP employees, an error the company has previously acknowledged. Transocean’s drill crew “put too much trust in BP, and they paid for that fact with their lives,” said Transocean attorney Brad Brian.

Halliburton’s lawyer said that critical safety tests were omitted because they would have required time and money.

When BP’s turn came to make an opening statement, its attorney cast the well’s operation as a “team sport” and praised Transocean and Halliburton as the best in their fields.

“There is a lot of background noise about the engineering decisions made by BP,” lawyer Mike Brock said. “This was a multiparty, multicausal event.”